Interview: Charles Handy; The Gods of Management Revisited

If management thinking has a conscience, it must be Charles Handy. In India recently to speak on business alchemy, Handy spent close to an hour with BT's R. Sukumar, discussing the 4 organisational cultures he introduced in The Gods Of Management-Zeus (power); Apollo (order); Athena (expertise); and Dionysius (individualism)-and more. Excerpts.

Q. If you look at the 20th Century, a lot of companies, especially the New Age ones, are moving towards the Athena culture, or the Dionysius culture. But, at the same time, there is a lot of wealth caught up in companies that have more of a Zeus culture, or the Apollo culture. How do you manage this transition? Is there a future for companies with such cultures?

The alchemist firms, the little ones, attempt to be benign Zeus cultures: they are, basically, family structures. Not the literal genetic family; but they are run as work families. And they're still going to be led by somebody in a Zeus-type fashion. In big corporations, there's got to be an Apollo element. You've got to collect the cash in a very systematic way. You've got to look after quality in a very systematic way. This requires rules and regulations, and those kinds of Apollo methods. But more and more big companies have got to move to a project culture. They have to collapse the hierarchy. And talk about teams, and leaders, and projects, which is very much the Athenian culture.

The Person

Name: Charles Handy
Age: 66 years
Education: Classical studies at Oriel College, Oxford
Occupation: Management thinker, consultant, and philosopher
Books Authored: Understanding Organisations (1976); Gods Of Management (1978); The Future Of Work (1980); The Making Of Managers (1988); The Age Of Unreason (1989); Inside Organisations: 21 Ideas For Managers (1990); Waiting For The Mountain To Move (1991); The Empty Raincoat (1993); The Age Of Paradox (1994); Rethinking Capitalism (1995); The Hungry Spirit (1998); The New Alchemists (1999)
BT interviewed him because: He's the last word on the future of work and organisations.

Moving from the Apollo culture to that is very difficult. The Apollo people do not find it easy to operate in a loose, informal framework where, on the whole, people do not have titles very much-they just belong to a team or a project. They wear informal clothing. They keep informal hours. They work late; don't start early. The Apollo people find it very difficult here. So, if they can't adapt, they leave.

The formula for efficiency is very clear. In 5 years' time, you should have half as many people as you do today; you should pay them well; and you must expect 3 times as much output. I guess the half that go are the Apollo people who are getting too old to change. It's tough, but this is a consequence of efficiency and the global economy. The people who stay, as the organisation moves into an Athenian culture, are paid well, and according to their performance. If the project works, they may get a bonus, or they may be put on to a larger project and get paid more. So, they do not get promoted; they get a larger responsibility in the project team.

The way you've described it, large organisations need to break themselves up into smaller project groups. Each of these would, in effect, have an Athena culture. But the larger ones would still need some level of Apollo. Do you think something like this could end up happening to the larger New Age corporations? The Yahoo!s of the world, for instance.

Yes, it's got to. The trouble is, it works the other way with firms like Yahoo!. They start as Dionysian; wild creatures, who come together. They have to merge into Athenian teams. And, as they grow bigger, they face a huge problem since they really hate Apollo-type worlds. Yet, they don't do that, they lose control of the cash, and the systems, and all that. So, they're going to have to have nasty-minded accountants and the kind of people they would not like to have over for dinner in their homes. That's quite difficult. But if they don't do that, they lose control.

This happens to a lot of small firms that also don't like the Apollo culture. They're comfortable in their Zeus cultures. They're terribly interested in people, markets, and customers, and all that sort of glory-stuff, but, actually, they do not watch the cash. And if you ask anybody-most of these people have been bankrupted once-it's always 'I didn't watch the cash!' They were expanding too fast; they weren't collecting money from the firms they were selling to, or the customers they were selling to. There was no credit control. That's boring stuff. So, you've got to have boring people. And good systems. They've got to move the other way.

So, we're going to have one set of organisations moving from too much Dionysius to a little Apollo; and we are going to have another set of organisations moving the other way, from too much Apollo to a little Dionysius...

That's right. And it's great for people who grow up as Athenians, who are problem-solvers, basically, and like working in groups and teams. Not everybody does. That's the way it's going to go.

Most management thinkers believe that the best motivator is the feeling that you are doing something for the greater common good. But if you look at the closest we've come to a working community or co-operative, it was the Soviet Kolkhoz, the co-operative farms. But that didn't work out. Today, most Indians believe the American model of business is the only thing that can work for them. But that doesn't look beyond profits. So, where do we go from here?

I think these are 2 extremes you've drawn. The other is a kind of a military model. It depends on the culture: it seems to me that in America, money is the measure of everything. Even if a lot of people don't like that, it still is what counts. That's how you buy status; that's how you get power; that's how you run for the post of the President. You've got to have money to do anything. So people are prepared to sacrifice some sort of job satisfaction, even some sort of balance in their lives-they take very short holidays; they work long hours-because they get the money. I do not think other cultures give money so much weight. They want other things also. This is why the Americans find it so hard to understand Europeans.

On the other hand, the Russian economic model doesn't work either. The fact that everybody is a co-owner does not mean they have to meet to take any kind of decision. Co-operative ownership does not mean co-operative management. That's where they made a mistake.

There's one chap in the book I've just authored, The New Alchemists, Andy Law, who set up an ad agency in which everybody is a co-owner. But it is not run like that. It's run as a series of project teams. They distribute the profits among themselves. And if there is any strategic decision to be taken-like should we grow, or should we sell ourselves-then they'll all meet. But, on the whole, the management is done in a different way. And I believe that we should allow everybody to be a partner and an owner. When you do that in a small organisation, it grows. In big organisations, of course, I am asking for them to be called citizens rather than owners. They have rights and so on. And those should include voting rights. But the management is another matter: the management is, basically, Athenian, an element of Apollo, a few Dionysians, alchemists around the edges-Dionysians and alchemists do not like joining organisations-and, maybe, a Zeus or two around the place, perhaps at the top, may be, if he has the vision.

They do, but they're not very good. First of all, they're more related to the share price than to the actual profits of the company. And the share price is affected by many things: for instance, the number of shares that are available in the market. One of the reasons why dot.coms are valued so highly is because there are very few shares floating around. Stock options tend to go mainly to the top executives. Give them to everybody and they become very small. So, they do not make enough difference to pay for a Christmas present. And they're not particularly related to your own individual effort really. Therefore, I am more inclined to go for some form of profit-sharing. Very few people adopt it.

What's going to happen to the organisation itself? Will there be a radical change in what it does and how it does them?

It won't be that radical. Two, sort of paradoxical things are going to happen. The big organisations, the elephants, are going to get bigger. In terms of output, and in terms of scope, but not in terms of staff. At the same time, they are going to divide themselves into smaller units. Only that way can they take the talent and give them exciting things to do. And they have to evolve a more complicated way of managing them. How do you manage people you don't see? You can e-mail them, video-conference with them and all that, but that's not enough. Hi-touch has to move with hi-tech; organisations are realising that they've got to meet these people. So, the more they invest in hi-tech, the more their travel expenses go up.